Great Time to Buy Florida

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Opportunity knocks:

• Take to the airwaves and land sales
• Scratch that niche: You might like it
• Self-discipline sets the bar for a high achiever
• Steven David's 12 techniques for succeeding in today's market

Marketing:

• Tune in to these 5 technology predictions
• Countering the critics
• 10 must-haves for your real estate Web site
• Media smarts
• Free mortgage information resources

Financial Planning:

• Build a balanced budget
• 5 ways to cut costs
• Free online financial planning
• Show me the money

Education:

• Take a walk down the knowledge path
• FAR's Realtor Institute
• Add to your bottom line now

You want to work smarter. You want to make more money. You need a spreadsheet! Mastering business basics is a numbers game. And for Realtors, it’s also a commitment to stick with the plan through thick and thin.

Show me the money

Let’s say you want to increase your income from $100,000 to $150,000 before taxes and deductions. If your average commission per transaction is $5,000, you’ll have to sell about 30 homes to earn that $150,000.

In the past you’ve sold 20 houses annually, so part of this high-income equation is time management as well.

Next, you need to review your closing ratios and determine how many prospecting contacts you need to make, how many listings or buyer clients you need to sign, and how many sales you need to have under contract to reach 30 closings. Figure backwards. Here’s how:

• If 95 percent of your contracts close, you’d need 32 contracts each year to meet your goal. (Divide 30 by 0.95 and round up.)
• If 85 percent of your listings or buyer clients result in a signed purchase agreement, you’d need to take 38 listings or buyer clients to reach your goal.
• If you get one signed listing for every five listing appointments you go on, you’d need to make 190 listing presentations to reach your goal.
• If you get one listing appointment for every 50 pieces of direct mail you send out, you’ll need to send out 9,500 direct mailings to reach your goal. Of course, you do more than one type of marketing and probably also get some business from referrals, but by plugging in those factors and your own ratios, you’ll have a better understanding of what you need to do to earn a specific amount of income.

Sales coach Joeann Fossland gives sales associates a spreadsheet that helps them track daily prospecting activities by dividing contacts into phone calls, open houses, and other factors. “It takes only a minute to fill in how many of each activity you do. If you do that for a month or two, you’ll know your numbers,” she explains.

“The numbers I usually use are that you should get one listing appointment for every 10 calls you make. And you should get the listing on at least 33 percent of the listing appointments you go on. More seasoned sales associates usually get the listing in 50 percent to 65 percent of the listing appointments they go on.” The spreadsheet also helps you tabulate your success rate with various types of prospects, such as FSBOs and expireds.

A final catch in this calculation is determining what effect the current housing market slowdown might have on your closing ratios. It’s very likely that sales will take longer, for example, or that more contracts will fall through, so increase your projected goals accordingly. Once you’ve calculated a number, you can develop a business plan on how you will achieve this increase—for example, targeting new niches or adding Internet advertising on search engines.

SOURCE: REALTOR magazine, 01/01/2008